Application of The Test
Applying the test above, the Grynberg court concluded that the prepayments satisfied the first prong. The prepayments were not mere deposits but irretrievable payments. However, the court found no valid business reason for making the payments in December rather than the following February or March when the payments were actually due. Because taxpayers failed the second prong of the test, the court did not apply the third requirement to the facts of the case. Because the prepayments were not necessary and ordinary business expenses for the year in which they were paid, the prepayments were not deductible.
Read more about this topic: Grynberg V. Commissioner
Famous quotes containing the words application of the, application of, application and/or test:
“Most people, no doubt, when they espouse human rights, make their own mental reservations about the proper application of the word “human.””
—Suzanne Lafollette (1893–1983)
“By an application of the theory of relativity to the taste of readers, to-day in Germany I am called a German man of science, and in England I am represented as a Swiss Jew. If I come to be regarded as a bête noire the descriptions will be reversed, and I shall become a Swiss Jew for the Germans and a German man of science for the English!”
—Albert Einstein (1879–1955)
“My business is stanching blood and feeding fainting men; my post the open field between the bullet and the hospital. I sometimes discuss the application of a compress or a wisp of hay under a broken limb, but not the bearing and merits of a political movement. I make gruel—not speeches; I write letters home for wounded soldiers, not political addresses.”
—Clara Barton (1821–1912)
“A decent provision for the poor is the true test of civilization.”
—Samuel Johnson (1709–1784)